Sheeren v. Gulf Ins. Co. of Dallas, Tex.

• Citation: 174 So. 380
• Decision Date: 17 May 1937
• Docket Number: 16579
• Court: Court of Appeal of Louisiana (US)
• Parties: SHEEREN v. GULF INS. CO. OF DALLAS, TEX., et al

174 So. 380

SHEEREN v. GULF INS. CO. OF DALLAS, TEX., et al

No. 16579

Court of Appeal of Louisiana, Orleans.

May 17, 1937

Jas E. Courtin, of New Orleans, for appellant.

Gordon Boswell, of New Orleans, for appellee.

Hugh M Wilkinson, A. Miles Coe, and Harry Nowalsky, all of New Orleans, and David L. Herman, of New Orleans, amici curiae.

OPINION

JANVIER Judge.

Plaintiff, Margaret Sheeren, an emancipated minor, while riding as a guest passenger in an automobile owned by Dr. David F. Wexler and driven by one Merrill Mattel under direction of Wexler, received physical injuries as the result of a collision between that automobile and a motortruck which was going in the opposite direction. Charging that the proximate cause of the accident was the negligence of Mattel and that Wexler is liable for the resulting damage, Miss Sheeren brings this suit against Wexler and also against Gulf Insurance Company of Dallas, Tex., alleging that company to be the liability insurance carrier of Wexler, and that, as such, it may be sued directly because of the provisions of Act No. 55 of 1930.

Wexler made no defense and, accordingly, judgment by default was rendered against him, the amount thereof being $ 3,500. Wexler did not appeal.

The insurance company, however, made answer denying that the accident had been caused by the negligence of Mattel and, in the alternative, charging that plaintiff had assumed the risk of Mattel's negligence, and also averring contributory negligence on the part of plaintiff. But especially, the insurance company, admitting the issuance of a policy to Wexler, relied upon the contention that it was not liable in any event because of the fact that the automobile of Wexler, which was involved in the accident, was not the one which had been specifically made the subject of insurance in the policy referred to.

The judge a quo, without finding it necessary to consider the other contentions, sustained the defense that the policy did not afford protection to Wexler against liability growing out of the use of the particular automobile which had been involved in the accident and that no policy covering that automobile had been issued and no liability or responsibility had been assumed in connection with the ownership or maintenance of that car. From this judgment plaintiff has appealed.

It is conceded that the policy of insurance contained, among its terms, the following:

"Gulf Insurance Company (3)5C does hereby insure Dr. David F. Wexler (3)5C against loss (3)5C resulting from damage (to persons or property) by reason of the ownership or maintenance of the automobile described in statement "11,' namely, a "1931 Chevrolet sedan, serial number 3AE84,005, motor number 2,855,228.' "

And it is also conceded that the automobile referred to in the policy had been sold by Wexler and a new one (the one involved in the accident) had been purchased long prior to the day on which the accident occurred. Plaintiff maintains that, in spite of the fact that the automobile mentioned in the policy had been sold, there is liability in the insurer for either of two reasons:

First. That though the policy referred to the automobile by make, number, model, and otherwise, nevertheless the true purpose of the parties was the issuance of insurance protection to Dr. Wexler personally, regardless of the automobile involved, and that, therefore, when he sold the first car and acquired the second, the coverage of the policy automatically transferred from the one to the other; and,

Second. That the insurer, by reason of its retention of the premium after discovery by it of the change in automobiles and by reason of its having negotiated with Dr. Wexler and on his behalf, after discovery of the change in cars, had estopped itself to deny the coverage of the policy.

The insurer concerns itself but little with the first contention, relying upon the policy provision affording protection against loss or damage resulting by reason of the ownership or maintenance of the automobile described and identified, and in connection with the second contention, points to the fact that, before it took any action looking to the defense or adjustment of the claim, it reserved its rights to deny liability under the policy and required that Wexler execute a document known as a "nonwaiver agreement," under which the insurer, without assuming responsibility, undertook to investigate the accident and to negotiate settlement. That nonwaiver agreement reads as follows;

"Whereas, Dr. David Wexler, hereinafter called the Assured, has reported to the Gulf Insurance Company, hereinafter called the Company, an accident occurring on or about June 14, 1935 under Policy No. 560225 RC4953, and,

"Whereas, the Company has not accepted liability in such accident because the automobile that was insured under the policy was not the automobile that was involved in the accident;

"Whereas, the assured contends that the Company is liable to him under the policy, and,

"Whereas, both parties desire to cooperate to reduce to a minimum the final loss arising out of such accident, and to postpone the determination of their respective rights and liability under the policy until the amount of the Assured's liability for damages arising out of such accident has been definitely determined:

"Now therefore, in consideration of the premises and the mutual promises hereinafter made, it is hereby agreed as follows:

"That it is the intent of the parties hereto to preserve in statu quo as of this date all their respective rights under the above numbered policy; that the Assured does not surrender or waive any of his rights under the policy; that the Company is to undertake investigation of said accident, negotiate settlement of claims arising therefrom, and defend any suit brought against the Assured, as a result of said accident, subject to all agreements, conditions and limitations of said policy, and also, subject to the further definite express understanding that in so doing, the Company does not assume liability, does not waive the right to deny liability, and does not waive its rights to rely upon the policy provisions and does not agree to pay any settlement that may be negotiated or any judgment that may be rendered against the Assured."

That the agreement was made is admitted, but it is contended that, subsequent to its execution, the conduct of the insurer constituted a waiver of its rights thereunder; in other words, that it waived the nonwaiver agreement. The act which, according to plaintiff, constituted a waiver, was the alleged delay of the insurer in finally and definitely announcing whether or not it would assume responsibility under the policy.

We first consider the contention of plaintiff that a liability insurance policy, such as the one involved here, does not terminate when the automobile described therein ceases to remain under the ownership or maintenance of the insured, and that, if the said insured acquires another automobile instead, then the coverage of the original policy automatically transfers to the new car. The proposition is so astounding that we have diligently searched the text-writers and the cases cited to ascertain on just what foundation the argument is based and we conclude that it results from the improper interpretation of certain language of the Supreme Court of Washington in Reimers v. International Indemnity Co., 143 Wash. 193, 254 P. 852, and from a misunderstanding of the discussions indulged in by various text-writers concerning the difference between the coverage afforded by policies of fire or theft insurance and the protection afforded by a liability policy. In the Reimers Case the court stated that it was not the truck which was insured, but that "respondent only was insured against liability which might be incurred by him through the operation of his truck," and it is this language which is pointed to as authority for the view that the coverage of a liability policy is personal and is in no way based on or identified with a particular vehicle. But the decision itself is complete authority for the view that that result was not reached, for the court took great pains to say that, in truth and in fact, the truck which was involved in the accident although certain parts had been changed was to all intents and purposes the same truck which had been made the subject of the insurance. The court discussed the fact that a vehicle, as a result of use and repair, might be changed part by part, and said that nevertheless within the contemplation of such a policy it would remain the same vehicle. Note the following: "The identification of respondent's truck was complete." The identity would have made no difference if plaintiff's theory is correct. Another case cited by plaintiff, Claverie v. American Casualty Company (C. C.A.) 76 F.2d 570, 571, is, in the main, authority for the view that such coverage is not personal and affords protection to the owner against accidents resulting from the use of the particular vehicle only which is made the subject of insurance. It is true that in that case the ultimate conclusion was that the insurer had waived the policy condition and had thereby consented to the change in vehicles. But the court very plainly said that, except for that waiver, there could not have been a decision against the insurer on any other ground for the reason that to hold it liable for accidents resulting from the use or maintenance of a vehicle which it had not insured "would be to create an obligation without giving any consideration therefor," and the court said that "the result would be the same whether the policy had previously expired or the occurrence did not come within its terms."

We ourselves not long ago...